Louisiana Law ReviewVolume 48 | Number 2Developments in the Law, 1986-1987: A FacultySymposiumNovember 1987

Workers' CompensationH. Alston Johnson

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Repository CitationH. Alston Johnson, Workers' Compensation, 48 La. L. Rev. (1987)Available at: https://digitalcommons.law.lsu.edu/lalrev/vol48/iss2/16

WORKERS' COMPENSATION

H. Alston Johnson*

Legislative Developments

Unlike the legislative sessions of 1985 and 1986, and contrary tothe usual expectations for the last session in a given legislature's termof office, the 1987 Regular Session of the Louisiana Legislature producedsome significant changes in the Workers' Compensation Act (the "Act").Some of these changes require extended comment in this space.

A series of acts dealing with medical treatment and expenses is likelyto make the biggest impact on the practical administration of compen-sation claims. Act 492' places some reasonable limitations on both theemployer and the employee with respect to medical examinations. Itretains the requirement, in section 1121 of the Act, that the claimantsubmit himself to medical examinations as reasonably necessary, butspecifies that the carrier shall not require the employee to be examinedby more than one specialist in a field without the employee's consent.On the other side, however, the amendment codifies the principle thatthe employee has the right to select, one treating physician in eachspecialty, but requires that he obtain the employer's consent to changespecialists after that initial choice. If a court determines that the employerhas withheld that consent arbitrarily, the employer is subject to attorney'sfees related to the dispute and any additional medical expenses causedby the refusal.

Act 4932 likewise places some limits on the reimbursement due forcertain medical procedures. A health care provider may not incur morethan an aggregate of $1,000.00 in "nonemergency diagnostic testing ortreatment" without the mutual consent of the employer or carrier andthe employee.' If the provider does so, the obligation to pay the fee isnot enforceable against the employer or the carrier. Fees incurred foremergency treatment are not affected by the limitation, but the providerbears the burden of proving that the treatment was indeed of an emer-gency nature. As with the provisions on change of specialist in Act 492,the employer or carrier is subject to an award of attorney's fees relatedto the dispute as well as any additional medical expenses caused by a

Copyright 1987, by LOUISIANA LAW REVIEW.

* Adjunct Professor of Law, Louisiana State University.

1. 1987 La. Acts No. 492.2. 1987 La. Acts No. 493.3. Id.

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refusal to agree to treatment if that refusal is found by a court to havebeen arbitrary.

A health care provider which has treated the employee at any timeis required under Act 4944 to release medical information and recordsto the employee, employer or carrier (or their representatives) concerningthe alleged compensable injury. The records are to be held confidentialby the employer or insurer, with an exception for their use before theDirector5 or in court.

Problems which have been caused by the failure of claimants toattach a certificate of rejection of the Director's recommendation in agiven claim to their district court petition are addressed in Act 291 . 6 Ifthere is a dispute between the employer and the employee, either mayseek the recommendation of the Director and must do so prior to filinga law suit.7 The original petition must contain a copy of a "certificateof rejection" from the Director, certifying that his recommendation wasrejected by one of the parties.' If the certificate is not attached, thepetition is subject to dismissal as premature. 9

In many instances, petitions have not been accompanied by therequired certificate. This has occurred either due to ignorance of thestatutory requirement or because the certificate was not physically avail-able within the time limitations required for filing the petition. Act 291attempts to solve the problem by providing that the suit is not prematureif the certificate is presented "at or prior to" the time of the hearingon an exception of prematurity. 0

This establishes a rather peculiar procedure. If the certificate is notattached initially, the opposing party (usually the carrier or employer)by answering without interposing the plea will waive the exception ofprematurity. If the exception is interposed, however, the prematurityproblem may be cured by the presentation of the certificate at thehearing. Thus, a petition, though premature when brought, becomesripe when heard. The only case in which an action would be prematureunder the revised standard would, in all likelihood, be a case in whichthe Director's office has never been consulted at all.

Act 396" contains a small, but nonetheless potentially significant,change in the calculation of an average weekly wage for a person earning

4. 1987 La. Acts No. 494.5. Director of the Office of Worker's Compensation Administration (hereinafter

"Director").6. 1987 La. Acts No. 291.7. La. R.S. 23:1310 (1985); La. R.S. 23:1311 (1985).8. La. R.S. 23:1311(C) (1985).9. La. R.S. 23:1314(B) (1985).

10. 1987 La. Acts No. 291.11. 1987 La. Acts No. 396.

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his wages on a monthly basis. Prior to the amendment, the calculationwas made by dividing his monthly salary by four. If a person earned$1,600.00 per month, his average weekly wage for purposes of deter-mining weekly benefits would be $400.00 per week under such a cal-culation. After this amendment, the calculation is to be made by firstmultiplying the monthly salary by twelve and then dividing the resultingamount by fifty-two. The same hypothetical employee under the newcalculation would be earning an average weekly wage of $369.23.

The remaining legislative acts affecting workers' compensation donot require textual discussion and are confined to the margin.' 2

JURISPRUDENCE

Deputy Sheriffs Revisited

Faithful readers of this column are quite aware of the judicial andlegislative tug-of-war during recent years over the status of deputy sheriffsand their entitlement to workers' compensation benefits. 3 Though pagescould be written to remind readers of the background, it suffices tonote that the core of the disagreement centers around the question ofwhether a deputy sheriff is a "public official," and thus is excludedfrom coverage as a non-employee, or a public employee entitled to thesame coverage as other employees. If one classifies deputies as publicemployees entitled to coverage, an important accessory issue arises:Should the local sheriff or the state itself pay for the coverage?

Gradually, through the process of judicial and legislative refinement,it appears to have been established, and properly so, that deputy sheriffs

12. 1987 La. Acts No. 266 amends La. R.S. 23:1181 (1985) to increase, from $25,000.00to $100,000.00, the amount of Louisiana immovable property which a foreign employerliable for Louisiana workers' compensation benefits must own in order to be self-insuredwithout securing liability insurance or posting the requisite statutory bond. 1987 La. ActsNo. 290 amends La. R.S. 23:1203(C) (1985) to specify that, if an employee uses his ownvehicle to obtain necessary medical care, the appropriate mileage rate for his reimbursementis that rate established by the state for reimbursement of state employees using their ownvehicles on state business. 1987 La. Acts No. 633 enacts La. R.S. 23:1203.1 authorizingthe state to fix a fee schedule for medical services payable in state self-insured workers'compensation matters. One is entitled to wonder whether the principle of fee schedulesin such matters will prove contagious to workers' compensation claims against privateemployers.

13. A convenient summary of the developments over recent years is contained inJohnson, Developments in the Law, 1980-1981-Workers' Compensation, 42 La. L. Rev.620, 645-46 (1981). Even after that discussion, the battle raged in the legislature and thecourts. See 1981 La. Special Sess. Acts No. 25 (codified as La. R.S. 23:1034 (1985));Brodnax v. Cappel, 425 So. 2d 232 (La. App. 3d Cir. 1982), overruled in Kahl v. Baudoin,449 So. 2d 1334 (La. 1984); and finally 1985 La. Acts No. 954, adding La. R.S. 23:1034(D)(1985 and Supp. 1987).

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should be treated as employees rather than officials-despite the factthat the Act "defines" them as public officials. The obvious intent ofthe definition is not to suggest that deputy sheriffs are really officialsrather than employees. Rather, it must be that the state does not wantto be liable for the expense of their compensation coverage. As em-ployees, they are entitled to a compensation remedy from someone,either the state or a local political subdivision. The precise assignmentof the cost of the compensation is a detail which for the momentappears to have been fixed against local political subdivisions.

Inclusion of deputy sheriffs in local government coverage and pay-ment of that cost by local political subdivisions, however, has been leftby the legislature to the discretion of the local authorities. As the Bardhas it, thereby hangs a tale. In Parker v. Cappel, 4 the inclusion ofsome deputies and the exclusion of others, either by statute or by choiceof local authorities, was upheld against constitutional attack. A deputysuffered a stroke and died four days later. His widow sued for com-pensation benefits, alleging that his death occurred in the course of andarose out of his employment. She sued the local sheriff, whose parishdid not provide workers' compensation coverage for its deputies, andlater added the state by amendment. Both the sheriff and the parishfiled exceptions of no cause of action, but the trial court overruledboth, holding the pertinent portions of the Act unconstitutional.

The widow argued that, since the Act specifically provides coveragefor the deputies of the Orleans Parish Criminal Sheriff 5 but leavescoverage for other deputies to local discretion, it denies equal protectionof the law to deputy sheriffs in other parishes. The Louisiana SupremeCourt rejected the argument, finding that the legislation furthers anappropriate state interest. It identified differences between the OrleansParish Criminal Sheriff and other sheriffs in the state, and found asuitable foundation for the distinction made in the statute.

The court's decision helps to advance the eventual solution to theproblem somewhat, but the facts did not afford the opportunity toprovide a complete solution. As the court noted, it was loath to rewritethe legislation judicially. The opinion left little doubt that the courtbelieved that deputies should not be made to bear their work-relatedaccident costs on their own, a view which is whole-heartedly supportedhere.' 6 The present statute is troublesome because if literally read it

14. 500 So. 2d 771 (La. 1987).15. La. R.S. 23:1034(A) (1985). The statute does not specify who is to bear the

expense of the coverage, but one may glean from other parts of the section the conclusionthat it is unlikely that these deputies would be regarded as employees of the state.

16. "We leave the Legislature to address the criticism. Absent that response, theparishes may provide their own workers' compensation to sheriff's deputies, whose salariesprobably ill-afford coverage for work-related injuries." Parker, 500 So. 2d at 776.

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"defines" deputies as "public officers and officials" of their localparishes, but then authorizes workers' compensation coverage for them(at local expense, of course).

There is a direct and simple solution. These and other workers whoare in fact not public officers or officials in the workers' compensationcontext should be referred to and defined as employees; their coverageshould be mandatory as with other employees; and the cost of thatcoverage should be squarely assigned to someone, whether it be the stateor the local political subdivision. The work-related accident costs ofdeputy sheriffs is too important an issue to be the subject of a politicalfootball game.

Heart Attacks and Strokes

During this term, the Louisiana Supreme Court returned to someground that it had successfully tilled several years ago. Difficult groundit is, too. There are very few physical incidents that present moretroublesome causation problems than heart attacks, strokes and othervascular accidents. Almost every jurisdiction encounters difficulty inassigning causation in such matters, and Louisiana has been no exception.

In 1982, the Louisiana Supreme Court authored two opinions whichoffered significant guidelines to the lower courts in resolving these prob-lems-Adams v. New Orleans Public Service, Inc.17 and Guidry v. SlineIndustrial Painters, Inc."5 These decisions were discussed in detail in thisforum at that time.19 In general terms, Adams on original hearing hadindicated a rather lenient view toward proof of work relationship, andGuidry was somewhat more rigorous. On re-hearing, the Adams opinionmoved closer to the announced Guidry rationale, and it seemed likelythat Guidry would prove to be the more influential decision.

The opinion in Reid v. Gamb, Inc.,20 during this term, seems toconfirm this view. There were indications after Guidry that the courtsof appeal were using its "stress greater than non-employment life" testin instances of pre-existing disposition to heart attack or stroke andwere reaching conclusions of denial of benefits more often than hadbeen done previously. 2 In Reid, the lower courts followed this pattern

17. 418 So. 2d 485 (La. 1982).18. 418 So. 2d 626 (La. 1982).19, Johnson, Developments in the Law, 1981-1982-Workers' Compensation, 43 La.

L. Rev. 613, 617-21 (1982).20, 509 So. 2d 995 (La. 1987).21, See, e.g., Mayeaux v. Commercial Union Ins. Cos., 492 So. 2d 188 (La. App.

3d Cir. 1986) (pains occuring at home after a rather ordinary work day were not consideredwork-related); Edwards v. Exxon Co., 485 So. 2d 228 (La. App. 3d Cir.), cert. denied,489 So. 2d 250 (1986) (stroke after minor physical exertion not work-related, even though

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in denying recovery and the supreme court granted a writ, but did notchange the result. Instead it simply took the opportunity to clarify theGuidry rationale.

The employee was the district manager of five restaurants in a regioncomposed of several parishes. He visited the various stores on a periodicbasis, performing various administrative and managerial tasks. On thedate in question, he was working with other employees to prepare arestaurant for its opening day. At 6:00 p.m., he finished work andpicked up a snack at a convenience store. He repaired to his motelroom, where he experienced some numbness in his right arm and handjust before he went to sleep. When he awoke the next morning, hefound that he could not lift his right arm. A cerebral vascular accidentwas diagnosed.

The majority opinion in Reid took the predictable step of extendingthe Guidry rationale from heart attacks to vascular accidents (strokes). 22

More importantly, the court announced that it would no longer respectthe distinction between the physical nature of employment stress andpurely mental or emotional stress, and that it also would no longerrespect the distinction between "extraordinary" stress and "ordinary"stress. If there was a distinction between the treatment of vascularaccidents in the earlier decision in McDonald v. International PaperCo. 23 and the treatment in Reid, the court thus seemed rather clear thatit intended the distinction to cease.

The result in Reid was a denial of benefits. The supreme courtcould discern no error in the trial judge's conclusion that the Workerhad shown no causal connection whatsoever between his work and hisinjury. Thus, regardless of the formula used to test the causal rela-tionship, his effort had to fail. The significance of Reid is not in itspresent result, however, but in its future use. Even though serving asa clarification of Guidry, it will suggest a very slight development ofthe rationale in such future cases toward a somewhat relaxed standardfor recovery. Caution should be exercised, as always, to delineate ascarefully as possible between those risks properly assignable to employ-ment and those which are truly personal risks that the employmententerprise should not bear.

Lenient Standards for Measuring Temporary Total Disability

Last year's discussion in this forum noted that judicial ingenuityhad triumphed over legislative craftsmanship once again in the workers'

it occurred on job premises during work hours); Johnson v. Hendrix Mfg. Co., 475 So.2d 103 (La. App. 2d Cir. 1985) (no causal link shown between exertion of employmentactivities and heart attack).

22. 509 So. 2d at 998.23. 406 So. 2d 582 (La. 1981).

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compensation field.24 The drafters of the comprehensive 1983 amend-ments had carefully amended the provisions relative to total and per-manent disability and (formerly) permanent partial disability benefits(now Supplemental Earnings Benefits, or SEB) to overrule the so-calledodd lot doctrine, and generally to impose very rigorous standards de-signed to make total and permanent disability awards rare indeed. 25

Curiously, the provisions governing temporary total disability benefitswere left unchanged. As discussed in this space last year, 26 the courtswere quick to note the omission and to conclude that there must havebeen no intent to change the pre-1983 provisions insofar as they wereapplicable to temporary total disability cases. Those provisions alsopermitted a lesser standard of proof-the ordinary preponderance ofevidence as opposed to the clear and convincing standard chosen by the1983 drafters. From there, it was only a small step to a determinationthat the claimant in the case at hand was indeed in a temporary status,and that, accordingly, he should be entitled to the standard used indisability cases prior to* 1983.

At the time last year's symposium was written, there were only twoexamples of this trend. Last year's trickle, however, has turned intothis year's deluge. In numerous cases decided during this term, claimantswere held to have established their right to temporary total disabilitybenefits by a preponderance of the evidence on the basis of pre-1983concepts such as odd lot status or working in pain. 27 In many of these

24. Johnson, Developments in the Law, 1985-1986-Workers' Compensation, 47 La.L. Rev. 521 (1987).

25. Cf. Johnson, Bound in Shallows and Miseries: The 1983 Amendments to theWorkers' Compensation Statute, 44 La. L. Rev. 669, 679 (1984).

26. Johnson, Developments in the Law, 1985-1986-Workers' Compensation, 47 La.L. Rev. 521 (1987).

27. Price v. Fireman's Fund Ins. Co., 502 So. 2d 1078 (La. 1987) (temporary totaldisability (TTD) established during six-month period); Talley v. Enserch Corp., 508 So.2d 197 (La. App. 3d Cir. 1987) (claimant failed to prove permanent total disability byclear and convincing evidence, but proved TTD by preponderance of the evidence duringthirty-month period); Green v. Jackson Rapid Delivery Serv., 506 So. 2d 1,345 (La. App.2d Cir. 1987) (claimant showed entitlement to TTD payments for one-year period); Johnsonv. Monroe Pulpwood Co., 505 So. 2d 862 (La. App. 2d Cir. 1987) (claimant establishedright to TTD payments, based upon substantial pain, "until termination of disability" ina few years); Bailey v. Zurich Am. Ins. Co., 503 So. 2d 611 (La. App. 4th Cir. 1987)(TTD payments awarded lasting from October, 1983, through trial and until an indefinitepoint in the future); Lang Pham v. Delta Petroleum Co., 503 So. 2d 149 (La. App. 5thCir. 1987) (entitlement to TTD payments shown, but case remanded for further takingof evidence); Thomas v. Elder Pallet & Lumber Sales, Inc., 493 So. 2d 1267 (La. App.3d Cir. 1986) (odd lot doctrine continues to apply to TTD cases). Occasionally, therewas a ruling that the claimant should be denied recovery because he had not establishedentitlement to total and permanent disability benefits by clear and convincing evidence.Roszell v. INA of Texas, Inc., 499 So. 2d 659 (La. App. 3d Cir. 1986).

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cases, there is little doubt that the court was intent upon finding a wayto use the pre-1983 standards to afford relief, and almost no doubtthat the results were the very ones that the 1983 amendments wereintended to prevent.

The writer will resist the temptation to point out that such a judicialeffort to adjust the balance struck by the 1983 amendments was pre-dictable and predicted. The treatment of injuries under the rubric oftemporary total disability benefits in the manner indicated in these casesseriously undermines the reform undertaken by the 1983 amendments.The question now is whether the inevitable legislative re-adjustment willmake some attempt to restore a more rational balance, or whether onlythis particular omission will be corrected-only to leave another spotin the Act where the judiciary will choose to adjust the balance onceagain.

Rehabilitation

An otherwise unremarkable decision during this term gives us someinsight into the way in which the new provisions on rehabilitation mightbe interpreted. In Works v. Trinity Universal Insurance Co.,28 the claim-ant had suffered a serious work injury that left him with a 25% disability.The employer's insurer determined that the claimant/employee was en-titled to rehabilitation, and eventually placed him with his old employerat his old rate of pay, but with modifications in his duties to accom-modate his disability.

As a practical matter, however, the claimant found that he washaving to exceed the defined limits of his "new" job with some fre-quency, and naturally was worried about the permanency of his newarrangement. The employee felt he was entitled to additional rehabili-tation services which would re-train him in a different skill for a jobof a more permanent nature that he could perform within his physicallimitations. The insurer resisted, and the trial court denied any furtherrehabilitation services on the ground that he was earning the sameamount earned before his injury.

The appellate court reversed, noting that it was very significant tothe court that the insurer had agreed that rehabilitation services werejustified. Having done that, the insurer could only then question theextent of rehabilitation. In the court's mind, rehabilitation meant morethan restoration of the employee to his old wages. It disagreed withdefendant's expert that the paramount goal of rehabilitation was to putthe injured person back at his old job with his old employer at his oldwage.

28. 501 So. 2d 1045 (La. App. 2d Cir. 1987).

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While "simple and pragmatic" in the court's words, this view is"not correct." ' 29 The court regarded this incorrect interpretation of thegoal of rehabilitation as specialized job placement that was inherentlytransitory and contingent upon the good will of the old employer. Rather,the court saw the statute as requiring "vocational education and ap-propriate training to make the worker competitive in the labor market."3 0

The case was remanded for an appropriate order requiring rehabilitationof the worker to prepare him for "secure, suitable employment."3 1

Intentional Act Exclusion

Ever since its introduction into the Act in 1976, the so-called in-tentional act exclusion has proved troublesome. The legislative intentmust clearly have been to interject some balance into the tort immunityscheme that it was extending to executive officers and co-employees,providing that though they were entitled to tort immunity in mostinstances, they were not to be excused from liability "resulting froman intentional act." 32

This peculiar choice of language was unfortunate, but to its credit,the supreme court rather early announced the proposition that "inten-tional act" in this context meant simply "intentional tort."3 3 Thus aclaimant, in order to establish that he should not be limited to acompensation remedy, had to prove either that the actor desired theharmful or offensive consequences of his conduct, or must have knownto a virtual certainty that they would occur.3 4

There was little dissent from this view,35 but there was considerabledissent about the mechanics of getting to that point in the inquiry.Could the claimant survive a threshold dismissal device such as anexception of no cause or a summary judgment by the mere incantationof "intentional" conduct? Even the supreme court provided mixed signalson the issue.3 6 Understandably, the intermediate appellate courts were

29. Id. at 1047.30. Id. at 1048.31. Id.32. La. R.S; 23:1032 (1985).33. Bazley v. Tortorich, 397 So. 2d 475, 480 (La. 1981).34. Id. at 481.35. Unless one considers the decision in Citizen v. Daigle, 418 So. 2d 598 (La. 1982)

as dissent. In that case, the supreme court ignored and thereby declined, in spite ofJustice Watson's dissent, to use the concept of "transferred intent," known to basic tortlaw, in order to permit a claimant to escape tort immunity. The actor had intendedassault but accomplished battery. In his concurrence, Justice Dennis seems to indicatethat "intentional act" and "intentional tort" might not necessarily be the same.

36. Compare Mayer v. Valentine Sugars, Inc., 444 So. 2d 618 (La. 1984), with Fallov. Tuboscope Inspection, 444 So. 2d 621 (La. 1984).

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accordingly mixed on the issue, with the broad view of the immunitytaken in Babin v. Edwards7 being the best-reasoned decision.

During this term, the supreme court had occasion to return to thesubject in Caudle v. Betts.3" A Christmas party at a car dealership wasthe occasion of some shenanigans with an electric automobile condenser.The reader will be spared most of the details; suffice it to say that thedefendant (who was president and principal stockholder of the dealership)was found to have shocked the back of plaintiff's neck with the con-denser and to have chased him with the condenser in hand until plaintifflocked himself in a safe place. Among other injuries, plaintiff sufferedan unexpected impairment of his occipital nerve.

The trial judge found that defendant intended to shock plaintiff,but did not intend to injure him beyond a passing, relatively minorelectrical shock. In other words, he intended the act and probably theoffensive consequences, but not the unforeseen harmful consequences.Surprisingly, both the trial court and the appellate court39 applied tortimmunity and dismissed plaintiff's suit.

The case afforded the supreme court the opportunity to elaborateupon its earlier work in the field. Quite properly, it cited basic tortprinciples which establish that the intent to cause injurious consequencesas opposed to offensive consequences does not change the fact that thevictim's privacy and sense of dignity has been invaded. Moreover, everyfirst-year tort student is well versed in the rule of the "eggshell skull"plaintiff, and his right to collect for even unexpected consequences ofa relatively minor contact. Thus, the fact that the actor may not haveintended the full consequences of his action is of no significance. Inthis instance, it was sufficient that the defendant intended the offensivecontact, and must as a matter of law be liable for the consequences ofhis act, however remote they might be.

Affirmation of these basic tort principles at the fringe of the com-pensation statutes, however, serves to highlight the continuing problem.No doubt the appellate court was moved by the unstated concern thatfull exposure in tort for the employer/actor seemed too harsh a sanctionfor conduct which was essentially horseplay in the workplace that gotout of hand. Its reaction was to attempt to re-define tort principlesotherwise well established in general tort law. The result would ultimatelybe two kinds of tort law, one for use in its own realm and one foruse in workers' compensation matters. Such an artificial distinction couldnot long last, even though it might be accomplishing "just" results inthe eyes of some.

37. 456 So. 2d 659 (La. App. 1st Cir.), cert. denied, 460 So. 2d 604 (1984).38. No. 87-C-0445 (La. Sept. 9, 1987).39. Caudle v. Betts, 502 So. 2d 146 (La. App. 3d Cir. 1987).

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Perhaps we need to re-visit the suggestion made in this forum someyears ago. 4° It was then suggested that re-entry into the tort systemshould be reserved for those particularly heinous situations which oc-casionally arise in the workplace, such as a physical assault by a su-pervisor on a worker. Some might say that the facts in Caudle are closeenough to such conduct that the re-entry into tort was appropriate. Solong, however, as the appellate courts continue to be somewhat reluctantto impose the ultimate sanction of potential tort liability (as evidencedby the surprising lower court decisions in Caudle), the supreme courtwill have to engage in legitimate "balancing," proper though it mayhave been in this instance.

Also, so long as that process continues, there is the danger thatconduct at the fringe of "horseplay" in the workplace might be thebasis for re-entry into the tort system. The tendency will be to give thebenefit of the doubt to the claimant under those circumstances, and wemay look up in ten years and find that the intentional act loophole istruck-sized rather than the size of a knitting needle. Perhaps the leg-islature should once again consider the possibility of a less draconiansanction for intentional torts, such as double the workers' compensationpayment otherwise due the claimant, as some type of penalty in lieu offull tort liability.

Immunity of the Principal after Berry v. Holston Well Service

Easily the most discussed decision in workers' compensation in thelast three years, Berry v. Holston Well Service, Inc.41 is now past itsinfancy and into a stable if not necessarily thriving childhood. As faithfulreaders will recall, Berry established a three-part inquiry to determinewhether the work in which the injured claimant was involved at thetime of his injury was part of the trade, business or occupation of thealleged principal. Failure of the alleged principal to hurdle successfullyeach of the three parts of the inquiry means at least that there can beno summary judgment in its favor and would ordinarily mean no im-munity after a trial on the merits.

The opinion was expressed in last year's comments that the Berryrationale might be more of a restatement of the law than new law.Experience during this term tends, predictably, to demonstrate supportfor both parts of that statement. In one group of cases, the initial Berryinquiry of whether the work of the injured employee was "specialized

40. Johnson, Developments in the Law, 1981-1982-Workers' Compensation, 43 La.L. Rev. 613, 626-29 (1982).

41. 488 So. 2d 934 (La. 1986). See Johnson, Developments in the Law, 1985-1986-Workers' Compensation, 47 La. L. Rev. 521, 523-25 (1987), for initial comments shortlyafter the decision was released.

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per se" had been decisive, resulting in a conclusion that the work wasnot part of the trade of the principal and therefore tort immunity wasnot available. 42 In another group of cases, surprisingly numerous, theprincipal survived the "specialized per se" test and successfully dem-onstrated that the work was not so specialized that it could not beconsidered a part of its regular trade, business or occupation. 4

1 Theimmunity of the general contractor in the construction field has provedresilient, under the so-called "dual contract" or "contract and contractout" alternative basis for tort immunity under section 1061."

Whether Berry has actually changed the law as to the immunity ofthe principal depends in part upon whom one asks. Opponents of theimmunity naturally think that it has, and can cite the cases above inwhich the "specialized per se" conclusion has defeated the immunity.Friends of the immunity can point to the equal number of instances inwhich the "specialized per se" rubric has not been definitive. Thesupreme court has not had occasion to re-visit the subject during thisterm. Even if it should do so, the writer sees no reason to depart fromthe view expressed last year. The ultimate solution should be legislativerather than judicial.

42. Chauvin v. Gulf Coast Minerals, Inc., 509 So. 2d 622 (La. App. 3d Cir. 1987)(work of erection of steel for commercial building found to be specialized per se; interestingdiscussion of jury question as to whether the contract in question was "to perform" or"to provide"); Davis v. Material Delivery Serv., Inc., 506 So. 2d 1243 (La. App. 1stCir. 1987) (over-the-road truck driver operating lime truck and required to load andunload lime was doing work which was specialized per se); Miller v. Atlantic RichfieldCo., 499 So. 2d 1095 (La. App. 3d Cir. 1986), cert. denied, 501 So. 2d 198 (1987)(welding as part of drilling process held to be specialized per se); Teague v. SawyerDrilling Co., 499 So. 2d 127 (La. App. 2d Cir. 1986) (cementing of surface casing aspart of oil well drilling process held to be specialized per se); Roberts v. Amstar Corp.,496 So. 2d 1146 (La. App. 4th Cir. 1986) (pipefitting is specialized per se).

43. Lewis v. Modular Quarters, 508 So. 2d 975 (La. App. 3d Cir. 1987) (sandblastingand painting not specialized per se; other evidence demonstrated that work was withintrade of alleged principal; summary judgment in favor of principal affirmed); Recatto v.Bayou Steel Corp., 508 So. 2d 877 (La. App. 5th Cir. 1987) (work of electrician notspecialized per se; other evidence demonstrated that regular employees of alleged principaldid same work at same time; summary judgment affirmed); Cantrell v. BASF Wyandotte,506 So. 2d 793 (La. App. 1st Cir. 1987) (work of security guard not specialized per se;although such work had always been contracted out, the court nonetheless affirmedsummary judgment); Palmer v. Loyola Univ., 496 So. 2d 421 (La. App. 4th Cir. 1986)(janitorial and labor services not specialized per se, but case remanded since no evidencewas available to proceed to other levels of inquiry under Berry).

44. Jackson v. Louisiana Power & Light, 510 So. 2d 8 (La. App. 5th Cir. 1987);Guillory v. Ducote, 509 So. 2d 455 (La. App. 3d Cir. 1987) (court also noted thatalternative argument that carpentry was specialized per se was incorrect); Williams v.Gervais F. Favrot Co., 499 So. 2d 623 (La. App. 4th Cir. 1986), cert. denied, 503 So.2d 19 (1987).

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Loss of Consortium

It appears that a consensus is emerging in the cases with respect tothe claim of a spouse of loss of consortium when the injury to theemployed spouse is covered by workers' compensation. In a word (orseveral), the loss of consortium claim is seen as derivative, and is subjectto the same defenses as the claim of the injured employee spouse wouldbe. This is consistent with the treatment of the claim for loss of con-sortium in other contexts, and thus is a predictable result.

There are only two cases, but the opinions to date have beenunanimous. 45 The results are correct, and demonstrate that the courtshave the proper view of the importance of maintaining the delicatebalance upon which the Act rests. The results indicate that the courtsare resisting the temptation to use the loss of consortium issue to movethe balance used in the Act more toward the employee. It is likely thatthe Act needs some movement in that direction, but the loss of con-sortium issue would have been the wrong place to accomplish that result.

Sharing of Attorney's Fees in Interventions

The decision which holds the most potential for making practicalchanges in the way workers' compensation cases are litigated and resolvedis Moody v. Arabie.46 An injured worker brought suit against varioustortfeasors, and the compensation carrier intervened. A jury found forthe worker against one of the tortfeasors and a judgment for $60,000.00was entered. The preferential claim of the carrier for some $35,400.00was recognized. The liability insurer of the tortfeasor tendered some$82,300.00 in payment of the judgment amount with accrued interestand costs. The check was made payable to the worker, his attorney andthe compensation carrier.

A dispute then arose over the disposition of the proceeds. Thecarrier contended that its $35,400.00 claim should be paid first, withoutdeduction of any amount for one-third contingency fee which plaintiffowed to his attorney. The attorney naturally contended that this one-third applied to the entire judgment, not just to the judgment balanceleft after deduction of the amount to be paid to the intervening carrier.

The trial court resolved the dispute by applying the contingency feefraction to the entire amount, yielding a fee of $27,400.00. It also heldthat $5,900.00 in out-of-pocket costs of the attorney should be reim-

45. Redding v. Essex Crane Rental Corp., 500 So. 2d 880 (La. App. 1st Cir. 1986),cert. denied, 501 So. 2d 774 (1987); Theriot v. Damson Drilling Corp., 471 So. 2d 757(La. App. 3d Cir.), cert. denied, 472 So. 2d 907 (1985). See also Mundy v. Kulkoni,Inc., 503 So. 2d 66 (La. App. 5th Cir. 1987).

46. 498 So. 2d 1081 (La. 1986).

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bursed as called for by the contingency fee contract. Thus, the totalpayment to the worker's attorney was $33,300.00. The carrier had paidmore than $49,000.00 in benefits and expenses, but slightly less thanthat amount was available from the total paid on the judgment. Thusthe compensation carrier was held to be entitled to the balance remainingafter the sum paid to the worker's attorney. It follows that the workerreceived from the $82,300.00 tort judgment exactly zero.

The trial judge seemed impressed by the attorney's argument thatunder Louisiana Revised Statutes (La. R.S.) 9:5001 the contingency feeranked as a first privilege on all of the proceeds of the judgment,"priming" even the rights of the intervening carrier.

The appellate court reversed this decision, holding that the contin-gency fee only applies to the sum left after deduction of the amountsdue to the intervening carrier. 47 This would have substantially reducedthe amount to be paid to the attorney, while permitting the interveningcarrier to receive its full reimbursement without bearing any of the costsof the worker's attorney.

This unhappy state of affairs, whether one focuses on the trial courtdecision or the appellate opinion, led the supreme court to grant a writ.Anyone who believed that the worker was going to be left with nothingafter receiving an $82,300.00 judgment in "his" favor has simply notbeen following the course of Louisiana workers' compensation casesover the years.

The supreme court addressed the problem as one of co-owners ofa right. Both the injured worker and the compensation carrier have beenharmed by the conduct of the tortfeasor, and own together the rightto be reimbursed by that tortfeasor. As such, each is required to con-tribute in proportion to his interest to the expenses of legal servicesthat inure to his benefit. Having established that proposition, it was asimple step to the formula which would establish, as a percentage, theamount of reimbursement of the carrier to the total amount of the tortrecovery, and then require the carrier to pay that percentage of theattorney's fees. In the case at hand, the carrier (calculating its reim-bursement without reference to the attorney's fees) received about 60°76of the awarded amount, and the plaintiff the remaining 40%. Thus,the "cost of the recovery" should be split between them in that per-centage.

On the whole, this was good news for the worker's attorney, whotheoretically won the argument about having his one-third contingencyfee applied to the whole amount rather than to the 40% actually re-covered by the worker. The supreme court, however, was not finished.It also announced application of the principle, carefully crafted in other

47. 485 So. 2d 660 (La. App. 3d Cir. 1986).

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cases, 48 that courts are not bound by the agreement between client andattorney that a specified fraction of the recovery will constitute theattorney's fee. With regard to both the fee of the worker's attorneyand the carrier's attorney, the court clearly indicated that the issue wasfor judicial resolution rather than contractual resolution between theparties. Specifically, the court noted that in order to qualify as areasonable cost of recovery an attorney's fee must reflect actual serviceswhich augmented recovery "rather than duplicative services or thosedesigned to benefit a single party such as the mere monitoring ofproceedings." 49

It seems obvious that neither the attorney for the worker nor theattorney for the carrier can expect to permit the other to carry theburden of prosecuting the case and then demand a share of the recoveryas an attorney's fee. There is no doubt a method in the court's madness.Some have felt that there is a certain imbalance in the proceedings whenthe worker lines up against alleged tortfeasors and insurers. The defend-ants probably have greater staying power in the litigation and mightsimply "wear down" the worker into a modest settlement at best. Inmany instances, the role of the intervening carrier was relatively small;it often was content to let the workers' counsel do most of the workand it would simply pick up its portion of any recovery at the end.Seen in this light, the court's opinion might be seen as an effort toeven up the sides just a bit, and to require as a practical matter thatthe intervening carrier participate more actively in the litigation as anopponent to the insurers on the other side. In theory, if the interveningcarrier is going to bear a portion of the fee paid to the worker's lawyer,the carrier is going to be much more active in the case.

Indeed, it is not impossible that in some instances the carrier mightsimply choose to let the worker's counsel represent its own interests andsave the cost of one attorney. Perhaps in a truly unusual case, theworker's attorney would permit counsel for the carrier to handle thematter. Such unusual alliances should prove very interesting. However,one thing is clear: Neither the carrier nor the worker can any longerbe indifferent to the role played by the other, or by their respectivecounsel. This, it is submitted, was precisely what the supreme court wasstriving to achieve in Moody.

48. See Leenerts Farms, Inc.. v. Rogers, 421 So. 2d 216 (La. 1982).49. Moody, 498 So. 2d at 1086-87.'

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